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Is JEMTEC Inc.'s (CVE:JTC) CEO Overpaid Relative To Its Peers?

Simply Wall St

The CEO of JEMTEC Inc. ( CVE:JTC ) is Eric Caton. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for JEMTEC

How Does Eric Caton's Compensation Compare With Similar Sized Companies?

According to our data, JEMTEC Inc. has a market capitalization of CA$4.5m, and pays its CEO total annual compensation worth CA$300k. (This figure is for the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at CA$246k. We looked at a group of companies with market capitalizations under CA$266m, and the median CEO total compensation was CA$138k.

Thus we can conclude that Eric Caton receives more in total compensation than the median of a group of companies in the same market, and of similar size to JEMTEC Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at JEMTEC has changed from year to year.

TSXV:JTC CEO Compensation, August 21st 2019

Is JEMTEC Inc. Growing?

On average over the last three years, JEMTEC Inc. has grown earnings per share (EPS) by 128% each year (using a line of best fit). Its revenue is up 45% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JEMTEC Inc. Been A Good Investment?

I think that the total shareholder return of 432%, over three years, would leave most JEMTEC Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by JEMTEC Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying JEMTEC shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.